Sir Ron Brierley takes aim at Murchison directors. Photo: Nic Walker
TRANS-TASMAN corporate raider Sir Ron Brierley has launched his first raiding party since transforming Mercantile Investment Co into an active investment play, aiming his guns at Murchison Metals and sending a shiver down the collective spines of local company directors.
Mercantile issued a statement to the Australian Securities Exchange on Tuesday announcing it had lodged a requisition for a general meeting of Murchison Metals for the purpose of removing the chairman, Ken Scott-Mackenzie, and managing director Greg Martin.
The raiders will seek to appoint in their place Gabriel Radzyminski, an executive director of Mercantile, and Paul Jensen, who will be an independent director.
Sir Ron, who is chairman of Mercantile, said the action to remove two directors was an ''urgent and direct response'' to the discovery of the excessive level of expenses being incurred by Murchison.
''If the new directors are elected, their first priority will be to stem the cash outflow,'' the statement said.
Mercantile has an 11.7 per cent stake in Murchison.
New Zealand-born Sir Ron is a classic corporate raider, having spent more than 20 years building up Guinness Peat Group into a billion dollar investment in the 1990s that was quick to attack companies with lazy balance sheets or management - or both - and either strip them of assets or resuscitate the business and sell it on for significant profits.
Sir Ron moved to Mercantile this year - he remains a director of Guinness Peat - and is building that company up into a new corporate raider.
Murchison is a shadow of its former self: the company was originally the driving force behind plans for the $6 billion Oakajee port and rail project, which was set to create a new export hub for a cluster of iron ore miners in the mid-west of WA.
As well as developing the port through a joint venture with Mitsubishi, Murchison had its own iron ore assets that were planned to funnel through the port. But the company unravelled through 2011 when it could not fund the development of Oakajee, and it eventually sold its stake to Mitsubishi for $325 million.
Recently, Mitsubishi declared the project was on hold because a partner could not be found.
Shares in Murchison have nearly doubled since August to close at 4¢ on Tuesday but have fallen more than 74 per cent since 2010.
Murchison has denied that it is spending excessive levels of investors' money and is in the midst of a string of capital returns to shareholders and then plans to wind itself up.